Correction: Illinois Medicaid-Overpayments story

CHICAGO (AP) — In a story April 18 about Illinois Medicaid paying an estimated $12 million for services for people listed in state records as deceased, The Associated Press erroneously reported that the state's contract with Maximus Health Services ended last year. The state continues to have a contract with Maximus for some services, but, effective May 1, state employees will work with the company to verify Medicaid eligibility.

CHICAGO (AP) — The Illinois Medicaid program paid an estimated $12 million for medical services for people listed as deceased in other state records, according to an internal state government memo.

The memo dated Friday, which The Associated Press obtained through a Freedom of Information Act request, says the state auditor compared clients enrolled in the Medicaid database last June with state death records dating back to 1970. Auditors identified overpayments for services to roughly 2,900 people after the date of their deaths.

The heads of the departments of Healthcare and Family Services and Human Services, the two state agencies involved with Medicaid payments, outline steps to fix the problem in the memo to their senior staffs.

The memo states that more than $7 million has been recovered and the rest is expected to be recouped by year's end.

Sen. Dale Righter, a Republican from Mattoon and the Senate GOP's point person on Medicaid reform, said the finding was further evidence that Democrats' arguments that they have done all they can to clean up the Medicaid rolls is "empty rhetoric."

"It's disappointing and somewhat enraging for taxpayers, but it's not surprising," Righter said. "I wish this administration would spend more time trying to solve the problems rather than trying to convince taxpayers that they've already solved them."

Republicans have pressed for the state to use a private company to verify Medicaid eligibility. Maximus Health Services was hired to scrub state Medicaid rolls following 2012 Medicaid-reform legislation. Republicans have said the company was achieving a Medicaid eligibility-removal rate of 40 percent.

But the state's largest public-employee union objected to the work being outsourced, and an arbitrator sided with the union last year. Effective May 1, state employees will work with Maximus to verify eligibility.

Republicans wanted Quinn to appeal the ruling. They have repeatedly said better verification of eligibility and rooting out fraud and abuse could help save the cash-strapped state much-needed funds.

Righter sponsored legislation to try to renew the state's contract with Maximus, but it was defeated in the Democrat-controlled Senate. He said Republicans will "absolutely renew" that push following the audit's release.

Rep. Greg Harris, a Chicago Democrat, said it's possible some of the payments were made for services that were provided while a person was alive, but paid after they died because of the lag time in billing. But he said regardless of the reasons, the memo raises "really serious concerns."